Expenses – ever-increasing and costly government regulation, ever-increasing taxation – keep going up. City taxes are up 3% and now there’s the carbon tax. Minimum wages are set to increase.

“Even in tough years, I could count on revenues being slightly ahead of expenditures,” says my business friend. “Now I just don’t see it. We can’t raise prices when sales are down. Only so many employees can be cut.”

The crunch, he predicts, will come when the banks get nervous. Banks make their loans based on a company’s value. If that value starts to drop, the banks stop lending, or will demand a pay-down, or increase interest rates. “That’s when the real blood-letting will start.”

Since the oil price collapse of 2014, Edmonton has been spared from the downturn that stuck a knife into Calgary and Alberta’s other resource-based cities.

Construction kept us afloat – but as current projects wind up (other than the ICE District), residential, commercial and industrial construction is being reduced to a trickle.

And while our economy is more diverse than a decade ago, we’re still a government town.

Our city economy is riding on the New Democrat government’s vow not to reduce government front-line services, not to cut staff or salaries in the civil service or the education and health sectors.

But the province is running record deficits of $10 billion to $11 billion annually. Alberta’s accumulated net debt has gone from zero to $27 billion in just a few years.

Something has to give.

An oil price recovery would be wonderful.

But the world is awash in natural gas and oil that is less costly to produce than oil from our oilsands. For many reasons, future world growth curves for oil/gas consumption are moderating.

A return to $70 or $80 oil from today’s $45 per barrel is wishful thinking. But Premier Rachel Notley’s government has no other plan to balance its books than hoping for higher oil prices.

Without energy royalties, government cutbacks (no matter the political stripe) will have to kick in.

Edmonton will be shocked when the government of the day has no choice but to restrain or decrease the government/public sector’s salaries and benefits.

Layoffs will become the order of the day. Or a provincial sales tax will have to replace gone-forever energy royalties.

The national economy doesn’t look much better. With the oil bust, Canada’s economy is being carried by Vancouver and Toronto’s speculative housing booms, which have no solid financial underpinning.

Ontario, Quebec, Canada and now Alberta are racking up record amounts of debt. Once interest rates start to climb from their record lows – as is inevitable – debt servicing charges will jump.

The environmental juggernaut is biting into Alberta and Canada’s economies. Pipelines are not being built, excessive regulation, wind and solar energy subsidies are adding billions upon billions to provincial budgets … with next-to-no effect on global warming.

October, my business friend says.

The recession hits Edmonton gale-force – for all the reasons stated above – in October.

I hope he’s wrong.

Maybe some Middle East conflict drives the price of oil back up. Maybe the provincial government can maintain its spending for another year or two.

Maybe Alberta Premier Rachel Notley will be a financial magician, balancing her budgets and paying down debt without layoffs or new taxes.

Maybe Mayor Don Iveson can carry on with the Valley Line LRT, neighbourhood renewal, redeveloping the City Centre Airport land, building bike lanes, upgrading the city zoo, re-purposing Northlands and taking stoplights off Yellowhead Trail … without continual property tax increases as house prices start declining.

Almost Done!

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